The Smith Commission Does Surprisingly Well

If, as the lawyers are so fond of telling us, the devil is in the detail, one might have expected that any attempt to put flesh on the promises of further devolution for Scotland would founder in a quagmire of abstraction. Actually the agreement reached by all the political parties, now published as the report of the Smith Commission, is refreshingly clear and sensible. It is also blessedly short. To cut to the chase there are two main principles. The first is that power should be devolved to the Scottish Parliament where practicable but not where the UK needs to act as a whole. For example foreign affairs and defence will be run by Westminster and, although the Scottish government will be entitled to borrow, that is subject to oversight by the UK - presumably exercised by the Bank of England. A practical line can also be discerned in the devolution of taxing rights. The Scots may vary the rate of income tax (at their expense) but not that of corporation tax. The UK does not want to find the profits of English companies being diverted to Scotland as a result of some canny rate setting.

The second pillar of the proposals deals with costs. Currently Scotland is subsidised by a block grant calculated in accordance with the Barnett formula. Where revenue streams (such as the first 10% of Scottish VAT) are assigned to Scotland, the block grant drops by that much. Where Scotland takes over expenses formerly met from central funds the grant is increased correspondingly. So far so neutral . The rub comes later when the Scottish Parliament uses its devolved powers to make changes. Yes they can reduce income tax or abolish air passenger duty but there won't be any increase in grant to cover that so they must either raise the money elsewhere or cut back on their expenditure. If they decide to spend on increased welfare benefits then again cuts or extra taxes must follow. If the Scots' reputation for financial caution counts for anything, they will make their decisions carefully.

It is worth testing this approach against the concerns which dominated the independence debate. Westminster was afraid that it would lose clout in international affairs. Its diplomatic and military positions are untouched. Scotland was worried that it would be excluded from the pound without being able to adopt the Euro. The pound will remain the currency for Scotland. The UK was concerned at the loss of the submarine base at Faslane. If anything the concentration of submarines there will increase. Scotland wanted more powers devolved to it. That requirement is met in spades.

Pretty good all round you might think but inevitably there are whingers. It is unfair, say some, that Scottish MPs should continue to vote at Westminster on laws which will now only affect the rest of the UK. The proposals don't go far enough, cry some Scottish Nationalists. We need similar devolution of power to the English cities, say local leaders. All these are matters for afterwards and Lord Smith wisely keeps clear of them. The immediate need is for a roadmap which enables Westminster to honour the promises made in the independence debate. That the Commission has delivered.